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Royalties from oil production on state lands is pushing Texas' Permanent University Fund toward a record $1 billion in annual revenue. (AP Photo/Hasan Jamali)

Justin Welby, the Bishop of Durham and a former oil-industry executive, has been chosen as the next Archbishop of Canterbury to lead the 85 million-strong Anglican communion, Prime Minister David Cameron’s office said.

Welby, 56, will succeed Rowan Williams, who announced his retirement in March, becoming the first holder of the post with hands-on experience of the corporate-bond market and trading derivatives during a business career that culminated in a role as treasurer of Enterprise Oil Plc in the late 1980s. Cameron’s office made the announcement in an e-mailed statement today.

Welby takes over as 105th Archbishop of Canterbury at a time when the global Anglican communion is split over the introduction of women bishops and the ordination of gay clergy. His previous ministry saw him specializing in reconciliation, which along with his links with Africa — he has visited Nigeria 70 times — may help him deal with opposition to the changes, much of which comes from the developing world.

“I am committed to and believe in the ordination of women as bishops,” Welby wrote in a letter to his diocese in northeast England in July. “We need to learn diversity without enmity, to love not only those with whom we agree but especially those with whom we do not agree.”

While women should be ordained as bishops, there should also be “a proper place, pastoral care and love” for those who are opposed, he wrote.

History Degree

After graduating from the University of Cambridge with a degree in history and law, Welby joined the oil industry, first at French explorer Elf Aquitaine SA, taking him to work in Paris for a time, according to a biography on the Diocese of Durham’s website. He worked on projects in West Africa and the North Sea.

The last five years of his oil career were spent at London- based Enterprise, where he became group treasurer, a role that would have put him in charge of the company’s cash and managing relationships with the banks.

Welby spoke of his experience trading derivatives in a speech to the House of Lords on June 11, referring to “the use of derivative instruments that have been behind much of the exacerbation of risk in the system since I first traded them 25 years ago, to the point today where their volume is many scores of times that of the underlying cash transactions.”

Ethical Adviser

In the late 1980s, Welby left Enterprise, which was bought by Royal Dutch Shell Plc (RDSA) in 2002 for 4.3 billion pounds ($6.9 billion), to study for the priesthood, though he’s retained an interest in business affairs. He is ethical adviser to the Association of Corporate Treasurers and has written a book entitled “Can Companies Sin?” He was appointed as Bishop of Durham in June 2011.

Welby warned in another speech to the House of Lords on June 20 that there is a danger to society if executive pay is not capped.

“Since the 1980s, the multiple between the average earnings in FTSE 100 companies and the earnings of top executives has risen from about 29 times to at least 140 times,” he told lawmakers. “If we do not see any improvement in these differentials, they will prove dangerous to social cohesion, as has been widely seen across Europe.”

As Bishop of Durham, Welby is the fourth-most senior cleric in the Church of England and entitled to sit in the Lords, Britain’s unelected upper chamber of Parliament.

Liquidity Trap

His business background was evident in a speech in May in which he discussed the economic outlook for the area of northeast England covered by his diocese. He referred to the liquidity of the corporate sector relative to households and government and said companies weren’t spending because they were caught in a Keynesian liquidity trap.

He advocated government funding for “shovel-ready” projects to boost confidence and kick-start the economy.

“Confidence comes from cranes and scaffolding: they build confidence as quickly as they erect buildings. When resources are short, we need targeted use of money to bring about quick investment,” he said. “The need for confidence and investment in skills is not merely to have a bigger economy but to enable us to see a transformation of our society. These things will not happen merely through exhortation but they require action and leadership.”
Welby, whose father’s first job was as a bootlegger during prohibition in the U.S., according to a Times article posted on the Durham diocese website, attended Eton College, the same private school as David Cameron.

He is a member of the Parliamentary Commission on Banking Standards, set up after the Libor rate-fixing scandal, and the panel’s chairman, Andrew Tyrie, said he hoped Welby would continue in his role.

“Justin is making an outstanding contribution to our work. He is a man of the cloth with considerable experience of industry and finance,” Tyrie said in an e-mailed statement. “I very much hope that he would feel able to remain a member of the commission until the completion of its work.”

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